Success Usually Requires Some Failure

We generally overestimate the negatives of failure and underestimate the nature of success. Some of this is a result of perceiving failure on an absolute basis and not understanding the potential of success. For example:

A key parameter in understanding success and failure is recognizing probability, risk, and value. Probability is the chance an event will occur like a coin flip. Risk is the potential gain or loss from an event like stocks have higher potential gains and losses than bonds or savings accounts. Value is the amount of the gain or loss which is mitigated by the its importance to the participant. For example, a single lottery ticket has low probability, low risk and high value. However, buying several dollars of lottery tickets every week can significantly raise the risk for low-income individuals. Savings accounts have high probability, low risk and moderate value.      

90 % of new businesses do not survive 5 years. However most start other businesses or find successful employment. In most sports only one team or player wins. However, many others exceed expectations and achieve relative success. The value of failure is best exemplified by the famous quote:

You miss 100% of the shots you don't take. “ -Wayne Gretzky

 Success is evidenced by watching kids grow up. When they learn to walk it is generally from their own trial and error. They try, fall down. get up, learn to walk and then don’t stop walking. They learn to ride a bike with great help and support from parents or others but still with significant trial and error. It is when they learn to drive a car that stress, failure and screaming frequently come into play. It may be the increased risk but it also the simple fear of the parents. There are some general guidelines for success.   

Constant measurement is critical to improving success. One of the most useful efforts use to help clients is to develop targets, regularly measure sales, profit, accounts, prices, costs and other measures important to the client. They help provide regular and objective feedback. They identify opportunities and challenges for change.

It also encourages continuous communication and reduces the absolute perception of failure. These measures should be as simple as consistent as possible.    

Test alternatives to find the best solutions. Innovation, problem solving and creativity require identifying and testing alternatives. Many of these can be evaluated with analytical tools or testing to reduce costs. 

Gaining experience is a critical part of success. Learning, training, and following proven processes are increasingly important in achieving success. Technology, sports, entertainment and the military have improved safety and performance by increasing experience and reducing human error. Experience also includes managing important events and learning rather than just eliminating false alarms along the way.          

Taking risks is not failure. Risk is a critical part of every decision. And, frankly, I think we all need more of it. We tend to think of risk as a taboo concept and it’s really not—once you understand it.

In order to benefit from risk, you need to define what risk is to you. Some people view risk as the “potential for harm or hazard” (think bungee jumping). I view risk as an “uncertain circumstance in which one manages to maximize the gains.”

Understand the perceived importance of the reward. People generally regret losses more than they appreciate gains—and that is a key factor to consider when making any decision. Fear is an innate instinct meant to protect us from harm, but too often we let fear dictate our decisions and it inhibits us from succeeding

 Change requires constant development of new approaches for success. A.I. Is an interesting example of change.  On one hand it has tremendous potential to enhance technology and decision making. On the other there is a learning process and mistakes. For example, the quality of results, innovation, plagiarism, creativity and random results can all be problematical. However, it is believed that experience and most important management can mitigate these issues.

 In summary, focusing on success and understanding that failure is part of the process can produce better decisions and results. We can always strive to do better and accept some disappointments along the way. Positive thinking is definitely an attribute but failure should be considered part of the process.

Related: Pricing Opportunities Continue To Grow